Which of the following is an example of an ad valorem tax? A) 5% of price B) 5% of quantity sold C) $0.50 per unit sold D) Government regulation ANSWER A
Date: September 9th, 2020
Consumers will always pay the entire amount of a specific tax whenever A) demand is perfectly inelastic. B) supply is perfectly elastic. C) Both A and B above. D) Either A or B above but not at the same time. ANSWER C
Date: September 9th, 2020
If the government decides to levy an ad valorem tax on product with a perfectly inelastic supply. The consumers tax incidence will be A) 0 B) 1 C) .5 D) Cannot be determined. ANSWER A
Date: September 9th, 2020
A specific tax on sellers will A) shift the demand curve to the right. B) shift the demand curve to the left. C) shift the supply curve to the right. D) shift the supply curve to the left. ANSWER D
Date: September 9th, 2020
The tax incidence of a specific tax or ad valorem tax is influenced by A) who pays the tax. B) the amount of the tax. C) the price elasticities of supply and demand. D) All of the above. ANSWER C
Date: September 9th, 2020
Why is the supply of oil more price elastic in the long run? A) New deposits are found. B) Better extraction technology is developed. C) Firms have the ability to change the amount of all inputs. D) All of the above. ANSWER D
Date: September 9th, 2020
The elasticity of supply of rental units in New York City is estimated to be about 0.10. Current price restrictions (price floors) are estimated to decrease the price of rental units by 10% below equilibrium price. By how much would price and quantity supplied change if the price floors were removed from the rental unit […]
Date: September 9th, 2020
For all goods, the long run demand curve is always more elastic than the short run demand curve. Indicate whether the statement is true or false ANSWER False. Goods that can be easily stored may have a more elastic short run demand curve than long run.
Date: September 9th, 2020
Relative to the short-run demand for gasoline, the long-run demand for gasoline is A) probably more elastic since people need time to change automobiles and driving habits. B) probably less elastic since people need time to change automobiles and driving habits. C) probably more elastic because people can hoard this good. D) probably less elastic […]
Date: September 9th, 2020
Some environmental groups are on record suggesting that the price of gasoline should be much higher than it was in the early 1990s. Why might they say this? A) They own stock in oil companies. B) They anticipate that the longer the price is high, the more elastic the response by consumers will be. C) […]
Date: September 9th, 2020
